​A Business Is Expected to Yield a Continuous Flow of Profit

question 15

Multiple Choice

​A business is expected to yield a continuous flow of profit at the rate of $200,000 per year.If money will earn interest at the nominal rate of 2% per year compounded continuously,what is the present value of the business forever? ​

• A) ​$10,100,000
• B) ​$1,000,000
• C) ​$10,000,000
• D) ​$10,010,000
• E) ​$1,100,000

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Definitions:

Molecular Structure

The arrangement of atoms within a molecule that defines its chemical properties and physical behavior.

Magnetic Metals

Metals that are capable of being attracted by a magnet or can be magnetized, such as iron, nickel, and cobalt.

Magnetized

The state of an object when its electrons are aligned in such a way that it produces its own magnetic field.

Material's Ability

The inherent properties and characteristics of a material that determine its suitability for specific applications or performances.